It’s official: The U.S. Court of Appeals for the Second Circuit will weigh in on the burning question of whether unpaid interns qualify as “employees” and can therefore demand lost wages. The court’s eventual ruling will have major implications for the many wage-and-hour lawsuits that interns have filed around the country.
In a brief order issued on Nov. 26, the appeals court agreed to review the single most important court victory for interns so far—a June ruling by U.S. District Judge William Pauley III in Manhattan that Fox Searchlight Pictures Inc.’s former unpaid interns qualify as employees for purposes of the Fair Labor Standards Act and New York labor laws. Fox’s lawyers at Proskauer Rose immediately sought interlocutory appeal, arguing that there’s an “urgent and compelling need” for Second Circuit review of Pauley’s decision.
In the same order, the Second Circuit agreed to hear arguments in Wang v. Hearst Corp., a class action filed on behalf of former unpaid interns at magazines like Harper’s Bazaar and Cosmopolitan. Splitting with Pauley, U.S. District Judge Harold Baer Jr. refused to rule as a matter of law that Hearst’s unpaid interns qualified as employees. The putative class members sought interlocutory appeal, and Hearst’s in-house lawyers filed a motion stating that they don’t oppose the request. Hearst is also represented by Proskauer Rose.
At the request of Outten & Golden, which represents the plaintiffs in both the Fox and Hearst cases, the Second Circuit consolidated the appeals for oral argument. Proskauer opposed consolidation. An argument date has not yet been set.
To be clear, the appeals court won’t issue a blanket judgment that unpaid interns do or do not qualify as employees. Rather, the panel will clarify what standard trial judges should use to make that determination on their own. Under the approach adopted by Pauley, which Outten & Golden prefers, judges balance six factors laid out by the Department of Labor. Employers prefer the approach adopted by Baer, which requires judges to consider who was the “primary beneficiary” of the internship.
The Second Circuit will also consider whether Pauley properly granted class certification in the Fox case. Proskauer argues that the responsibilities of class members varied dramatically, so their claims are too individualized to be resolved on a classwide basis.
Fox and Hearst counsel Elise Bloom of Proskauer didn’t immediately return a call seeking comment. We also didn’t hear back from plaintiffs counsel Adam Klein of Outten & Golden.